News last week that China might release a blacklist of U.S. companies sparked speculation about which companies might be on the list, and the impact of such a list on technology and geopolitics.

Beijing’s potential release of the blacklist is widely seen as a retaliatory response to U.S. moves to restrict Chinese companies, including Huawei Technologies Co. and ByteDance Ltd.’s video-sharing app TikTok.

A federal judge Sunday blocked the Trump administration from banning the popular app amid a pending restructuring deal that includes

Oracle Corp.

and

Walmart Inc.

Huawei, following a series of restrictions including placement on a U.S. trade blacklist, recently has been racing to develop its own operating system in the absence of U.S.-origin technology.

It’s unclear who is on the Chinese blacklist, but observers said it could include businesses that compete directly with Chinese companies. Some believe the list could span beyond technology companies.

“It could be social media, it could be AI. It could be companies outside of the tech sector,” said Aaron Cooper, vice president, global policy, the Business Software Alliance, a Washington, D.C.-based trade group. “One of the concerns that we and others have about having a list like this is how potentially broad it is.”

The implications of a blacklist could vary, said Tarun Chhabra, senior fellow at the Center for Security and Emerging Technology at Georgetown University’s School of Foreign Service. They could range from target companies being banned outright in China, which he said “seems less likely at this juncture,” to facing “more paperwork and bureaucratic scrutiny.”

The list may not have much of an impact, said Jeff Pollard, an analyst at Forrester Research Inc. He said if competitors of Huawei are on the list, for instance, those companies are less likely to have sizable footprints in China as is.

“Their operations are not necessarily going to be dominated by China, and their business in China is probably not going to be the bulk of their revenue,” Mr. Pollard said. “So it will certainly impact them, but I don’t regard it as being particularly devastating.”

The bigger impact of the feud between the U.S. and China could be a further fragmentation of the internet, a shift driven in part by governments scrutinizing companies over data privacy practices and national security concerns.

This trend—where a system constructed originally as an open model divides along competing technology stacks, applications and approaches to data privacy and openness—could impact a range of players, analysts said, including various companies and investors.

“This does move the trend in that direction. And I think that is problematic,” BSA’s Mr. Cooper said.

The division of the internet and technologies along national lines could weigh more heavily on smaller than larger companies, said Mr. Pollard, of Forrester. He said companies looking to grow internationally will find it difficult to compete in countries that prefer domestic competitors.

As a result, he said, companies looking to grow abroad will likely merge or join with similar companies already domiciled in the destination market, or commit to setting up operations in those markets that go beyond sales teams. He said such partnerships are common in China, and that both partnerships and acquisitions will likely happen with greater frequency in other countries.

“I think what ultimately is going to fade is the ability to access markets purely from a sales perspective, where everything kind of goes back to a couple centralized locations,” Mr. Pollard said. “They’re going to have to actively participate and create jobs in countries in order to access the customers in those countries.”

Venture capital could also be affected, said Mr. Chhabra, of CSET. He said there are large firms in the U.S. that already make international investments, such as Sequoia Capital’s and General Atlantic’s stakes in ByteDance, and that backing often comes with advice and expertise.

“As technology becomes ground zero for U.S.-China competition,” he said, “I think governments are going to be looking at those investors and asking: Is this really what we want to see?”

The BSA’s Mr. Cooper said national security objectives in imposing restrictions are legitimate, but those restrictions need to be for the purpose of national security, not for protectionism.

Anytime there are protectionist measures that either restrict the ability of a company to do business in a country or give preferential treatment to domestic companies over foreign ones, according to Mr. Cooper, “the economies—both in that country and in other countries that would otherwise be providing services—are going to be harmed.”

Write to Jared Council at [email protected]

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